Benchmarking Assignment Example | Topics and Well Written Essays - 3500 words

Benchmarking - Assignment Example The intention of this study is benchmarking as an improvement process which is mainly used to discover as well as incorporate the best practices in operation. It is the most preferred process which understands and identifies the elements of world class performance in work process. There are four processes in benchmarking which includes planning, analysis, action and review. There are three different types of benchmarking which includes internal, external and best practice. About 70% of the fortune 500 companies goes for benchmarking companies like Ford Motor Company had benchmarked its function of account payable against Mazda Motor. Studies have shown that top management usually does not support the benchmarking. Mangers should not be discouraged from the process of benchmarking. It provides managers to know their goals through the data. According to Betts, there are people who perceive that their individual performance is better than actually it is which is also termed as the Lake Wobegon effect. Betts have conducted a research to seek if these phenomena are also present when the employees are asked to give their views on the performance of the organization. Overestimation of performance is common in organization as well as in individuals. Individuals rate themselves better than they actually are projected with the help of an example. Around 87% of MBA students at Stanford rate their performance to be at top in comparison with their peers, about 90% of the students believed that were above average and only 10% thought they were below average. Similar is with organizations. Thus benchmarking is important in order to escape from the Lake Wobegon effect as the consequences of this performance may not result to be effective for organizations or mangers. According to Alfred North Whitehead, it is not ignorance but ignorance of ignorance which leads to the death of knowledge. The performers who are below the average and are ignorant of the fact that they are poorer performer usually are not motivated to improve (Betts, Croom & Lu, 2011, p.734). Lake Wobegon effect or benchmarking revolves around perverse dynamic. The mangers believe that they are above average performers. But in reality not all mangers are above average neither does all of them deserve to get a performance bonus. Therefore establishing an appropriate peer group and benchmarking is the only option to establish a competitive edge over the competitors (Lipman & Hall, 2008, p.33). Therefore it has been proved that overestimation of performance is common in organizations and individuals. As per a survey conducted by Betts, it has been proved that overestimation of performance is common as 75 % of the employees reported above average performance, 20 of them reported average performance and only about 5% reported to be below average performance. The people are bad at understanding the average performance basically when they are to evaluate the performance of organization in which th ey work. Therefore the consequence of over estimating is likely to bring about a change and so a greater effort should be put on benchmarking performance and also in spreading awareness in respect to benchmarked to the organization (Betts, Croom & Lu, 2011, p.740). Thus creating a need for change is must in the organization but as seen the management decision of benchmarking usually creates a resistance in the employees. Change is an important aspect and should be done on regular intervals. Manager’s use benchmarking to compare the performance of employees on some given dimension in comparison with other organizations performance so that it can be decided how successful the change has been. For example, when Xerox was